The Impact of Marriage Equality on Hawai′i’s Economy and Government: An Update After the U.S. Supreme Court’s Same-Sex Marriage Decisions

The U.S. Supreme Court’s decisions in the two same-sex marriage cases have substantially increased the short-term and medium-term benefits that could accrue to Hawai‘i if the Hawai‘i State Legislature enacts legislation allowing same-sex marriages to begin in Fall 2013 or early in 2014. Our updated report comes to the following conclusions.

The U.S. Supreme Court’s decision to overturn California’s Proposition 8 and allow same-sex marriages to resume again in California has massively increased the potential gains to the state’s tourism industry from same-sex couples visiting Hawai‘i either to marry or to honeymoon and from guests attending their weddings or marriage celebrations. This is because marriage equality in California increases the proportion of Hawai‘i’s visitors from states with marriage equality from 18 percent to 54 percent. We estimate $166 million in additional spending over the 2014-2016 period from marriages and honeymoons of same-sex couples visiting from states with marriage equality.

The U.S. Supreme Court’s ruling in the DOMA case has opened the door to a limited set of federal rights for all same-sex couples regardless of whether they live in a state with marriage equality. Some same-sex couples from states without marriage equality now have incentives to travel to another state to marry and honeymoon. Some of these couples would choose to marry and/or honeymoon in Hawai‘i if same-sex marriage were legal in Hawai‘i. Including spending from marriages and honeymoons of same-sex couples from states without marriage equality increases total additional spending to $217 million over the 2014-2016 period.

We estimate that marriage equality in Hawai‘i will increase State of Hawai‘i and City and County of Honolulu general excise tax revenues by $10.2 million over the 2014-2016 period. State income tax revenues would also increase, but we have not estimated their magnitude.

Without access to marriage in Hawai‘i, local same-sex couples can only gain access to federal marriage rights by traveling to the U.S. mainland to marry. This reduces same-sex couple spending in Hawai‘i, harms the Hawai‘i wedding industry, and raises the cost to many Hawai‘i same-sex couples of becoming married.

Marriage equality in Hawai‘i would lead to substantial federal tax savings for married same-sex Hawai‘i couples with a spouse as a beneficiary on the other spouse’s employer-paid health insurance. Marriage equality would also allow married Hawai‘i same-sex couples to become eligible to draw spousal benefits from a number of federal programs, including social security.